So we’re also investing in our BD team. We invested a lot in the clinical side from a sales perspective. We’re investing now on the ADx side and rebuilding that BD team and making sure that we have the tools and expertise that will allow us to grow in 2024.
Mason Carrico : Maybe talk about liquid biopsy, because that’s going to be a big product for you guys.
Vishal Sikri : Yes, liquid biopsy is something that we get approached by from pharma all the time, is we do a lot of tissue testing right now, which is what we’ve built our business on. But on the liquid side, especially for solid tumor and as Chris mentioned earlier, we’re very much underpenetrated on the solid tumor side because we didn’t have the right product mix, and now we are launching our liquid biopsy CGP, which will allow us to make that offering to pharma where they don’t have tissue to give to us for samples that have been sitting around 3, 5, 10 years old from the clinical trials that have been completed. So we’re able to go back and actually try and get some of that business with our new offering that we’re planning to launch this year.
Operator: Up next, we have Andrew Cooper with Raymond James.
Andrew Cooper: Maybe just first focusing on kind of price for a little bit here or AUP, I should say. Can you just give a sense for how much more runway is there in that 40% of the increase that’s come from RCM and price? Or maybe ask another way, what can we expect that to contribute on a yearly basis, once mix is stabilized or in the scenario where kind of on an apples-to-apples basis, we think about mix being stabilized?
Chris Smith: Yes. Without kind of getting into granular specifics, we said earlier NGS was driving about 60%. We are still seeing mix improvement in other aspects of the business, which is driving a component of AUP or revenue per test as well. I think in terms of the initiatives, we think pricing is a multiyear opportunity for us, and we also think the revenue cycle initiatives that are just increasing the amounts where we’re getting paid for what we expect to be paid is a multiyear opportunity. I think we have multiple year opportunity to continue to close the gap between what we’re expected to be paid and what we are being paid. Again, as I’ve said in prior calls, it is multifaceted. I mean, there are some other clearly identifiable areas of prior authorizations or medical necessity or medical records that we’re dealing with.
And then there’s the payer policy aspects, which are a little bit harder, particularly with the larger panel test. And so as some of the biomarker legislation gets approved in states over time, that will also help close the gap for specific tests, where we may not be getting reimbursed today or where we’re not being reimbursed fully. Again, I think there’s a lot of different areas that we have identified that we have teams working on to close that gap and see a multiyear runway.
Andrew Cooper: And then maybe just one more. On the LRP update, obviously, great to see. Maybe just any context for what that does or doesn’t do to the EBITDA margin expectations that you laid out back in April and whether that number can be a little bit higher for ’26 or maybe how we think about even beyond that time frame, where adjusted EBITDA margins might go in the event of kind of that little bit faster revenue growth?
Chris Smith: Yes. What we said almost a year ago was we expected EBITDA margins to be in the mid-to-high teens by 2027. Obviously, going towards the higher end of going to above the high end of that range, I think will help accelerate that. I don’t know that it changes meaningfully when we achieve that mid-to-high teens, but it could pull it forward, I think, a period of time. And also, just our ability to generate operating leverage off that revenue growth, I think, will help the adjusted EBITDA growth over time as well. We initially said, we expected to be adjusted EBITDA positive in 2024. Obviously, we achieved that in 2023. Again, almost probably pulling forward somewhat a year on that front. I think as we look at our ability to generate operating leverage on the revenue growth, it clearly will benefit our long range plan from an adjusted EBITDA and adjusted gross margin basis.
Jeff Sherman: Andrew, I think as we like I talked about earlier, as we’ve seen the levers and the ability to pull multiple ones to get leverage and pull through on this business. You saw this year the significant amount of our growth drop into the bottom-line. And so I think that we — that’s enhanced our confidence in some of these things. Now we still have things like value capture program where we want to go get anywhere from $10 million to $15 million a year. We want to improve gross margins and get gross margin leverage by a 100 basis points every half. I mean, all those are fundamental, but I think now, like when you think about Melody, on her side, on the operations, she now has the detailed plans in place and we can see that. So, I think, it just has given us a greater sense of confidence in our ability to deliver it.
Operator: The next question comes from Derik de Bruin with Bank of America.
John Kim: You have John Kim for Derek here. I’m going to try to ask this one more time. Great to hear the 2024 guide and the update on the long-term guide here. Any other details that you could share on what this split is going to be between the clinical services and advanced diagnostics? I think you previously talked about how the clinical services would be a bigger portion of the sales, but would be helpful to know any additional thoughts that you might have?
